US hydrogen and industrial gases maker Air Products says it will not take a final investment decision (FID) on new projects until its current facilities have secured at least 75% offtake.

Chief executive Seifi Ghasemi told an analyst call that new projects will only be approved “after securing anchor customers,” which is why there are “not too many other projects in the pipeline.”

The company has dropped out of a proposed $4.5 billion joint venture to produce green hydrogen in Wilbarger County, Texas, which never reached FID. It says it has sold its development rights to its partners.

With commercial operations first eyed for 2027, the project was planned to install 1.4 gigawatts of wind and solar power generation to enable an output of 200 tonnes/day of green hydrogen. It would have been one of the largest green hydrogen plants in North America, Kallanish notes. 

The announcement comes amid a slump in the hydrogen industry, which is facing high costs and uncertainty around demand.

“The recent Chinese stimulus and the rate cuts in Europe and North America have yet to stimulate growth, and could provide upside to the 2025 projections. The tailwind from these actions will likely be more evident later in 2025,” analysts at Jefferies comment. “Given the change in administration, a decrease in interest in alternative energy could emerge as a headwind in the US for projects without offtake agreements.”

Air Products is currently advancing two major projects in North America. The Net-Zero Hydrogen Energy complex in Canada has committed 60% of its capacity so far, and discussions are ongoing to secure more, with operations to come online next year.

The Blue Hydrogen project in Louisiana, meanwhile, is expected to receive permits over the next two years and start operations in 2026.

In the year ended 30 September, sales dipped by 4% to $12.1 billion compared to the previous financial year due to lower energy cost passthrough, which was partially offset by higher pricing. Air Products net income jumped by 65% to $3.9 billion following the sale of the company’s liquified natural gas business for $1.2 billion, as it focuses on industrial gases and clean hydrogen. Expenditures next year are estimated to be $4.5-5 billion.